Why are Russia’s stainless steel imports declining?

Russia’s stainless steel imports declined to 227,100 tonnes in the first half of this year, reflecting a 3.8 per cent decrease year-on-year, according to the national special steel association (USSA). The reduction varied across product categories, with stainless cold-rolled flat products down by 0.7 per cent, hot-rolled flats decreasing by 12.4 per cent, seamless pipes by 18 per cent, and wire by 37.7 per cent, as reported by Kallanish.

Conversely, some product intakes grew, with long products slightly up by 0.7 per cent, welded pipes surging by 30.8 per cent, and primary billets soaring by 85.5 per cent, though specific tonnage for these categories was not provided.

Import values for stainless steel saw a notable increase, with the average customs price rising 20 per cent year-on-year to reach $2,507 per tonne. China dominated supply, accounting for 73.3 per cent of Russian imports, followed by India at 14.7 per cent, Indonesia at 8.6 per cent, Vietnam at 1.4 per cent, and Turkey at 0.7 per cent.

While earlier forecasts anticipated a record volume of stainless steel imports in 2024, USSA’s latest data suggests a modest outlook. Russia’s total stainless steel imports in 2023 reached 487,000 tonnes, a 31 per cent increase from the previous year and 5.1 per cent above the 2021 pre-sanction levels. 

For 2024, USSA’s ‘pessimistic scenario’ anticipates a slight 0.2 per cent rise in imports to 487,700 tonnes, while the ‘optimistic scenario’ foresees a 7.3 per cent boost to 522,300 tonnes, assuming reduced lending rates and increased domestic demand.

However, the recent hike in the Central Bank’s key interest rate to 21 per cent may impact these projections. USSA notes that Russian producers can support some domestic demand in 2024, though their output and product variety remain limited.

According to Rosstat, Russian stainless steel production fell sharply in September, declining by 15.8 per cent from the previous month and 34.6 per cent year-on-year to 20,200 tonnes. Cumulative production from January to September totalled 214,300 tonnes, down by 12.5 per cent year-on-year. Stainless steel consumption also declined in Q1, falling 2.8 per cent to 115,300 tonnes and typically ranging from 400,000-500,000 tonnes per year.